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Question : It refers to the proportion of debt in overall capital. Which concept is highlighted in the given statement?

Option 1: Financial management

Option 2: Financial planning

Option 3: Financial leverage

Option 4: None of the above

 


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Financial leverage


Solution : Financial leverage refers to the proportion of debt in overall capital. As the financial leverage increases the cost of funds declined because of increased use of cheaper debt but the financial risk increases.

Hence, option C is correct.

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